Corbett to play hardball on pension reform

HARRISBURG - With only a week until he delivers his budget proposal, Gov. Corbett is making it increasingly clear that his administration is willing to play hardball to get the legislature to confront the escalating cost of public employee pensions.

And likely to be caught in the middle of the fracas: aid to public schools.

Speaking Monday at a monthly press club luncheon, Corbett budget secretary Charles Zogby reiterated - albeit more forcefully than before - that unless legislators tackle the rising cost of Pennsylvania's two major pension funds, there will be deep cuts in the next state budget, and very possibly in education funding.

Pension reform "is essential to avoiding deep, immediate - and, yes, painful - cuts," not just in the coming budget, but in spending over the next few years, Zogby said.

Asked where those cuts might occur in the budget for the next fiscal year, which begins July 1, he noted that the bulk of the year's pension costs consist of benefits paid to public school teachers.

"There will be some who will argue that because it's a public-school funding cost, that maybe it ought to be borne in other things in public education," the budget secretary said.

That stance is likely to define the battle over spending that will ensue in the Capitol once Corbett gives his budget speech before the legislature on Tuesday.

The governor told The Inquirer's editorial board last week that he did not foresee cutting aid, as he has in previous years, for public schools or the state-related universities, Lincoln, Penn State, Pitt and Temple. But in the same breath, he said he would not rule out changing that scenario if legislators fight his yet-to-be-announced pension proposal.

Zogby added little detail Monday regarding that proposal. He reiterated that current retirees' pensions would not be touched and that the administration was not looking to change benefits already accrued by current employees - only their benefits going forward.

Asked how far administration officials were willing to push on pensions - were they prepared, for instance, to forgo timely passage of the state budget - Zogby was circumspect, but noted that in 2014, governor and legislators alike are on the ballot.

"This is the year to deal with pension reform," he said. "I think if we don't do it this year, we are going to have some very difficult years ahead of us. And we are going to have to deal with it at a time that doesn't really lend itself to doing it the right way, [especially if] in an election year."

A harbinger of what awaits Zogby and Corbett came Monday from the state's largest teachers' union. Its spokesman contended the administration is setting up a false fight, an either-or battle with little basis in reality. He said Corbett has other options, such as freezing tax cuts for businesses.

"There are other alternatives. The governor is just not talking about them," said Wythe Keever, spokesman for Pennsylvania State Education Association, whose 187,000 members include teachers and staff at schools and state-funded colleges.

Keever noted that legislaturors had acted as recently as 2010 to reduce pension costs via a measure which, among other things, cut benefits for new employees.

The pension fight is not the only one awaiting Corbett. In his budget speech he also is expected to roll out his plan for funding roads, bridges and mass transit, as well as a sweeping proposal to privatize state liquor stores - both hot-button issues that have lingered on legislative sidelines for years.

Contact Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com, or follow on Twitter @AngelasInk.